Zenith forecast.- Programmatic, going beyond 58% of total display by 2017

Programmatic will become the main method of trading digital display this year, accounting for 51% of expenditure, and will rise to 58% of expenditure in 2017. This means a 31% increase by next year.
These figures, as well as the rest of the data published in this post come from Zenith’s Programmatic Marketing Forecasts, published today.

The report, which covers 41 key advertising markets, estimates that programmatic will grow comfortably faster than social media (which will go up a 25%) and online video (+ 20%). A growing proportion of these other channels will be traded programmatically.

The figures on Zenith’s Programmatic forecast refer only to digital media, but programmatic trading is starting to spread into the ‘traditional’ media.

“Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets,” said Benoit Cacheux, Global Head of Digital & Innovation at
Zenith. “We believe that the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments, especially private market places,
and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”

USA the top market and China shows lots of room for growth

Following the data inside Zenith’s report, the US is the biggest programmatic ad market by a long distance, worth $24Bn in 2016 and accounting for 62% of total global programmatic adspend.

In the second spot, quite below the US level, UK posts $3.3Bn worth, and China comes third, with a total market worth $2.6Bn.
Programmatic trading accounts for 70% of display in the US and the UK, but only for the 23% in China, so there is plenty of room for a quick rise in China.

Programmatic spreading out of Digital and turning from price to quality

At first programmatic marketing was often used to reach target audiences as cheaply as possible, with little regard for the quality of the sites in which the ads appeared. It is now being used along with valuable data segments to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages and encouraging them along the path to purchase, often in premium environments.

Jonathan Barnard (Zenith’s Head of Forecasting). Image by courtesy of Johnathan Barnard.
Jonathan Barnard (Zenith’s Head of Forecasting). Image by courtesy of Johnathan Barnard.

Some television, radio and digital out of home platforms already offer automated and data driven trading of inventory. It will take years, but eventually programmatic trading will be available as standard across traditional media.

Programmatic advertising has risen to dominate the digital display market in just a few years, having accounted for just 13% of display adspend in 2012. Programmatic adspend grew from $5Bn in
2012 to $39Bn in 2016, at an average rate of 71% a year. Its growth is slowing down as it consolidates its dominance of the display market, but we expect programmatic advertising to grow at an average of 28% a year to 2018, when it will reach $64Bn.

Benoit Cacheux (Global Head of Digital & Innovation at Zenith) and Johnathan Barnard (Head of Forecasting at Zenith) have contributed to this post.

Image over the headline.- Benoit Cacheux (Global Head of Digital & Innovation at Zenith) . Images © Zenith, composition and edition, Eastwindmarketing.

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